Nov 10 (Reuters) – Futures tracking the S&P 500 and the Dow Jones indexes rose on Tuesday as cooling oil prices emboldened investors to wade deeper into equities, ahead of inflation data likely to set the tone for the rest of the week.
The gains build on Monday’s solid jump, with the benchmark S&P 500 index posting its biggest one-day percentage gain since April.
But Nasdaq 100 contracts were flat as the tech rally took a breather. Chips were mixed in premarket trading, with Micron and Marvell Technology about 1% higher, but Intel down 0.5%.
Nvidia’s shares rose 1.3%, attempting a recovery after touching a seven-month low in the previous session following the controversy around CEO Jensen Huang.
CPI DATA IN FOCUS
Investors have been reassured as some brokerages have said last week’s selloff in AI stocks went too far. Fears of tougher data center oversight were overblown, analysts said, despite a Democratic-controlled Congress.
Still, a hotter-than-expected Consumer Price Index reading for October could threaten the recovery in stocks.
The CPI likely increased 0.3% last month after accelerating by 0.6% in September, a Reuters survey of economists predicted. On an annual basis, core CPI is estimated to have expanded 2.8%, following a 2.6% gain in September.
The rate is still well above the Federal Reserve’s 2% target.
At 5:01 a.m. ET, Dow E-minis were up 205 points, or 0.39%, S&P 500 E-minis rose 12.5 points, or 0.17%, and Nasdaq 100 E-minis lost 3 points, or 0.01%.
Brent crude futures fell 3.6% and slipped below $90 a barrel for the first time since August.
“The slowdown in data center construction may ultimately impose greater discipline on capital expenditure. It may also potentially favor the companies that have already controlled enormous amounts of compute capacity,” wrote Brian Levitt, chief global market strategist at Invesco.
“For the near term, a slower AI infrastructure buildout could favor more defensive areas of the stock market. But it’s important to distinguish between an elongation of the AI investment cycle and the end of it.”
ANTHROPIC ROADSHOW AWAITED
Anthropic is expected to formally launch the roadshow for its initial public offering on Tuesday, with pricing expected next week.
The roadshow will set the stage for one of the biggest IPOs on record. A listing by Anthropic could also force other AI heavyweights to compete harder for investor dollars.
“The easy AI trade, where you could buy any company that was part of the AI ecosystem and make money from a general optimism about AI’s potential, is mostly done,” wrote Aswath Damodaran, a finance professor at New York University’s Stern School of Business.
Additionally, neocloud firm CoreWeave is expected to report quarterly earnings after market close on Tuesday. Questions about the sustainability of the AI boom and the company’s debt burden have pressured the stock recently.
A strong performance could help reassure investors about the health of the industry, which SpaceX CEO Elon Musk has said could face consolidation and failures.
CoreWeave shares were 2.4% higher in premarket trading. Its peer Nebius rose 1.5%.
(Reporting by Niket Nishant in Bengaluru; Editing by Devika Syamnath)
